Archive for the ‘Price-fixing’ Category

When an individual commits a serious offense, chances are that he or she is going to face a criminal charge. When a corporation breaks the law in a significant way, in most cases it faces a civil penalty.

This disparity between the treatment of human persons and corporate ones became increasingly apparent to me as I finished processing the data for the expansion of the Violation Tracker database my colleagues and I at the Corporate Research Project of Good Jobs First are releasing on June 28.

Violation Tracker 2.0 adds data on some 700 cases involving banks and other financial services companies brought by the Justice Department and ten federal regulatory agencies as well as 600 involving non-financial firms in areas such as price-fixing and foreign bribery. These 1,300 cases account for well over $100 billion in fines and settlements.

These plus the environmental, safety and health cases that made up the initial version of Violation Tracker bring the total number of entries in the database to 110,000 for the period since the beginning of 2010. Of that number, only 473 — less than one half of one percent — involve criminal charges.

It may come as a surprise that the largest portion of the criminal cases involve serious environmental matters referred to the Justice Department by the Environmental Protection Agency and a few from agencies such as the Coast Guard. The largest of these was a $400 million settlement with Transocean in connection with the Deepwater Horizon disaster in the Gulf of Mexico but most have penalties below $1 million.

The next most common category is price-fixing, with 99 cases that imposed penalties ranging up to the $500 million paid by the Taiwanese company AU Optronics. There are 82 tax cases, most of which involve charges against Swiss banks for helping U.S. taxpayers keep their offshore accounts hidden from the IRS. Foreign Corrupt Practices Act cases brought by the Justice Department account for 53 cases, with the biggest penalty, $772 million, paid by the French company Alstom.

Other categories include serious food safety violations, market manipulation and failure to adhere to rules against doing business with countries deemed to be enemies of the United States.

The significance of the 473 cases is diminished by the fact that in 35 percent of them the companies weren’t really prosecuted. Instead, they paid a penalty and signed either a non-prosecution agreement or a deferred prosecution agreement. These are gimmicks that allow companies to avoid the consequences of a criminal conviction.

Of the 308 cases in which there was an actual guilty plea or verdict, 161 were environmental matters, many of which were brought against small companies for things such as toxic dumping. Relatively few large corporations were targeted.

The category with the largest number of big business convictions is price-fixing, which in recent times has often meant Asian automotive parts companies. Seven big U.S. and foreign banks (or their subsidiaries) have had to enter guilty pleas. In just two cases did U.S. bank parent companies — Citigroup and JPMorgan Chase — enter those pleas. These were in a case involving manipulation of the foreign exchange market. After their pleas, they and the foreign banks also charged got waivers from SEC rules that bar firms with felony convictions from operating in the securities business.

So here’s what it comes down to: Apart from when they engage in price-fixing, large corporations rarely face criminal charges. When they do, they are often allowed to settle without a formal prosecution. And when they do plead guilty, these can get waivers from the consequences of their conviction.

Keep this in mind the next time a corporate lobbyist complains about excessive regulation.

Conventional economists and the policymakers who follow their advice continue to insist that the market is an inevitable force to which we must all pay homage. Belief in the power of the “invisible hand” is used to justify all manner of conservative policies, including resistance to living wage ordinances.

Yet there is plenty of evidence that influences other than supply and demand play a role in commercial activity, even when government is not involved. A key example concerns the setting of prices, which is supposedly the purest of free market activities but is frequently the result of collusion among supposed competitors.

Anyone who read Adam Smith in college may have been exposed to his observation that “people of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices.”

I was reminded of the enduring truth of that statement in the course of gathering data for the forthcoming expansion of the Violation Tracker database I oversee as part of my work for the Corporate Research Project of Good Jobs First. The bulk of that expansion will cover the many sins of the banking sector, but it will also include other commercial offenses such as price-fixing.

Since the beginning of 2010, the Antitrust Division of the Justice Department has resolved price-fixing cases against more than 80 companies. This is one of the few areas in which corporations routinely face criminal charges and usually have to enter guilty pleas rather than getting off with a deferred-prosecution or non-prosecution agreement.

Those 83 companies have had to pay a total of more than $4 billion in fines, with the individual amounts ranging as high as $500 million in the case of Taiwanese electronics company AU Optronics, which pleaded guilty to fixing prices of LCD displays used in computers and televisions in the United States. A federal jury found that the company conspired with its competitors during monthly meetings secretly held in hotel conference rooms, karaoke bars and tea rooms around Taiwan.

AU Optronics is one of five Taiwanese companies that have faced U.S. price-fixing charges in recent years, but the largest number of defendants in these cases come from Japan. Forty-nine Japanese companies have paid a total of $2.8 billion in penalties. Adding in the two defendants from South Korea and one from Singapore, Asian companies accounted for more than two-thirds of the cases and three-quarters of the penalties.

Price-fixing, however, is not an exclusively Asian proclivity. The list of defendants include 14 U.S. companies, seven from Germany, two from Switzerland and one each from Bermuda, Chile and Sweden.

The industry that has dominated U.S. price-fixing prosecutions in recent years is auto parts, which accounts for 42 defendants that have paid some $2.6 billion in penalties. More defendants come from the freight industry but the average penalties have been lower, totaling $449 million. The electronic components sector accounts for $583 million, mainly as a result of AU Optronics.

While many of the culprits are lesser known manufacturing and service companies, the list also includes corporations familiar to consumers. Among these are Bridgestone, Panasonic and Samsung.

Keep these cases in mind the next time someone insists that the market is sacrosanct

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Note: Violation Tracker 2.0 — which will add banking offenses, money-laundering, defrauding of consumers, foreign bribery and export-control/sanctions violations as well as price-fixing — is scheduled to be released on June 28.

The ongoing corporate crime wave showed no signs of abating in 2015. BP paid a record $20 billion to settle the remaining civil charges relating to the Deepwater Horizon disaster (on top of the $4 billion in previous criminal penalties), and Volkswagen is facing perhaps even greater liability in connection with its scheme to evade emission standards.

Other automakers and suppliers were hit with large penalties for safety violations, including a $900 million fine (and deferred criminal prosecution) for General Motors, a record civil penalty of $200 million for Japanese airbag maker Takata, penalties of $105 million and $70 million for Fiat Chrysler, and $70 million for Honda.

Major banks continued to pay large penalties to resolve a variety of legal entanglements. Five banks (Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS) had to pay a total of $2.5 billion to the Justice Department and $1.8 billion to the Federal Reserve in connection with charges that they conspired to manipulate foreign exchange markets. The DOJ case was unusual in that the banks had to enter guilty pleas, but it is unclear that this hampered their ability to conduct business as usual.

Anadarko Petroleum agreed to pay more than $5 billion to resolve charges relating to toxic dumping by Kerr-McGee, which was acquired by Anadarko in 2006. In another major environmental case, fertilizer company Mosaic agreed to resolve hazardous waste allegations at eight facilities by creating a $630 million trust fund and spending $170 million on mitigation projects.

These examples and the additional ones below were assembled with the help of Violation Tracker, the new database of corporate misconduct my colleagues and I at the Corporate Research Project of Good Jobs First introduced this year. The database currently covers environmental, health and safety cases from 13 federal agencies, but we will be adding other violation categories in 2016.

Cheating depositors. Citizens Bank was fined $18.5 million by the CFPB for pocketing the difference when customers mistakenly filled out deposit slips for amounts lower than the sums actually transferred.

Overcharging customers. An investigation by officials in New York City found that pre-packaged products at Whole Foods had mislabeled weights, resulting in grossly inflated unit prices.

Food contamination. In a rare financial penalty in a food safety case, a subsidiary of ConAgra was fined $11.2 million for distributing salmonella-tainted peanut butter.

Adulterated medication. Johnson & Johnson subsidiary McNeill-PPC entered a guilty plea and paid $25 million in fines and forfeiture in connection with charges that it sold adulterated children’s over-the-counter medications.

Illegal marketing. Sanofi subsidiary Genzyme Corporation entered into a deferred prosecution agreement and paid a penalty of $32.6 million in connection with charges that it promoted its Seprafilm devices for uses not approved as safe by the Food and Drug Administration.

Failure to report safety defects. Among the companies hit this year with civil penalties by the Consumer Product Safety Commission for failing to promptly report safety hazards were: General Electric ($3.5 million fine), Office Depot ($3.4 million) and LG Electronics ($1.8 million).

Workplace hazards. Tuna producer Bumble Bee agreed to pay $6 million to settle state charges that it willfully violated worker safety rules in connection with the death of an employee who was trapped in an industrial oven at the company’s plant in Southern California.

Sanctions violations. Deutsche Bank was fined $258 million for violations in connection with transactions on behalf of countries (such as Iran and Syria) and entities subject to U.S. economic sanctions.

Air pollution. Glass manufacturer Guardian Industries settled Clean Air Act violations brought by the EPA by agreeing to spend $70 million on new emission controls.

Ocean dumping. An Italian company called Carbofin was hit with a $2.75 million criminal fine for falsifying its records to hide the fact that it was using a device known as a “magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea rather than using required pollution prevention equipment.

Climate denial. The New York Attorney General is investigating whether Exxon Mobil deliberately deceived shareholders and the public about the risks of climate change.

False claims. Millennium Health agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid and other federal health programs for unnecessary tests.

Illegal lobbying. Lockheed Martin paid $4.7 million to settle charges that it illegally used government money to lobby federal officials for an extension of its contract to run the Sandia nuclear weapons lab.

Price-fixing. German auto parts maker Robert Bosch was fined $57.8 million after pleading guilty to Justice Department charges of conspiring to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automakers in the United States and elsewhere.

Journalists have traditionally been taught to avoid superlatives and other sweeping statements. Yet the New York Times just made that rookie mistake and ended up publishing an erroneous description of the track record of Toshiba prior to the recently disclosed accounting scandal that has led to the resignation of the top executives of the Japanese electronics giant.

“Toshiba Quickly Loses a Spotless Reputation” was the headline of the print version of the flawed effort by the Times to put the revelations in context. This may be the first case of extensive accounting fraud at the company, but Toshiba’s track record is far from spotless.

For example, like numerous other Japanese manufacturers, Toshiba has been the subject of price-fixing allegations. In 2012 the company paid $21 million to settle a U.S. class action case involving LCD flat panel screens after a jury ruled against the company and awarded $87 million to the plaintiffs. In 2010 Toshiba was fined 17.6 million euros for its role in a case brought by the European Union charging ten producers of memory chips with anti-competitive behavior.

In 1999 Toshiba committed to spend up to $2.1 billion to settle a class-action lawsuit alleging that the company had sold millions of defective laptop computers in the United States. The following year it agreed to pay $33 million to settle claims that it sold substandard equipment to federal agencies.

Going back further, Toshiba was involved in a scandal in 1987 over allegations that one of its subsidiaries violated Western export controls by selling submarine sound-dampening equipment to the Soviet Union. The incident led to resignations of top executives and temporary restrictions on U.S. imports of certain Toshiba products.

The lesson that the Times failed to grasp is that corporate misconduct rarely emerges out of nowhere. In fact, the 300-page report on the accounting scandal prepared by outside lawyers and accountants (the English version of which as of this writing has not been made public) charges that improprieties such as the overstatement of profits had been going on for at least seven years. Given what came to light in the Olympus scandal of a few years back, it is possible that subsequent revelations will show that Toshiba was cooking the books for a much longer period.

One thing that can be said about Japanese corporate scandals is that they usually lead to rapid resignations of top executives. Toshiba is also replacing half the members on its board of directors. Such house cleaning does not always occur at U.S. corporations involved in misconduct cases.

We have examples such as JPMorgan Chase, which has had to pay out billions of dollars to settle a variety of lawsuits and regulatory actions, including a recent one involving manipulation of foreign exchange markets that required the bank to plead guilty to a criminal charge. Throughout this all, Jamie Dimon had remained in place as CEO and, unlike apologetic Japanese executives, has loudly denounced regulators and prosecutors. American business does not believe in shame.

Generic drugmakers are supposed to be the heroes of the pharmaceutical business, injecting a dose of competition in what is otherwise a highly concentrated industry and thus putting restraints on the price-gouging tendencies of the brand-name producers.

Just recently, the Food and Drug Administration approved a generic version of Copaxone, paving the way for the first multiple sclerosis medication that is not wildly overpriced.

Yet some generic producers are acting too much like Big Pharma. Israel’s Teva Pharmaceuticals just announced a $40 billion offer for its rival Mylan NV, which had recently made its own bid for another drugmaker, Perrigo. A marriage of Teva and Mylan would create the world’s largest generic drugmaker with more than $30 billion in revenue from customers in 145 countries.

Bigger would not be better, at least for customers. A stock analyst told the New York Times: “Last year taxes were one of the main drivers,” referring to deals in which Mylan and Perrigo reincorporated abroad to avoid federal taxes and Pfizer sought to do the same. “Now the main driver is getting bigger. Getting bigger gives you better pricing and better leverage.”

Even before the Mylan deal, Teva’s shining armor has been getting tarnished. Recently, its subsidiary Cephalon agreed to pay $512 million to settle allegations that it made questionable payments to other generic producers to keep their cheaper versions of the narcolepsy drug Provigil off the market.

Last year the Federal Trade Commission sued Teva and AbbVie for colluding to delay the introduction of a lower-priced version of the testosterone replacement drug AndroGel. While AbbVie filed what the agency called “baseless patent infringement lawsuits,” it also entered into an “anticompetitive pay-for-delay” deal with Teva. Mylan’s record also has blemishes. It once had to pay $147 million to settle price-fixing allegations.

A weakening of the deterrent power of generics is troubling at a time when the brand-name producers remain sluggish in their introduction of new drugs and are doing everything possible to milk their existing offerings. Their idea of innovation seems focused these days on what are known as “biosimilars,” close copies of certain brand-name drugs that are somewhat less expensive but much more costly than traditional generics. In March the FDA approved the first biosimilar, a cancer drug called Zarxio made by Sandoz. Pfizer indicated its intention to compete in this arena by announcing plans to acquire biosimilar pioneer Hospira.

Rising drug costs are, of course, a concern not only for individuals but also for taxpayers. The Medicare program, which thanks to the Bush Administration and Congress cannot negotiate with pharmaceutical companies, now spends about $76 billion a year providing drug benefits.

To be fair, Part D costs in recent years have been lower than the Congressional Budget Office had previously projected, but the CBO attributed the difference in large part to the increased use of generics. If generic producers continue to consolidate — and collude with brand-name producers — those savings will evaporate and we will be completely at the mercy of Big Pharma.

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New Resource: Greenpeace has introduced the Anti-Environmental Archives, a collection of thousands of documents on the efforts of corporations and their surrogates to undermine the environmental movement and government regulation.

The bull market in corporate crime surged in 2014 as large corporations continued to pay hefty fines and settlements that seem to do little to deter misbehavior in the suites. Payouts in excess of $1 billion have become commonplace and some even reach into eleven figures, as seen in the $16.65 billion settlement Bank of America reached with the Justice Department to resolve federal and state claims relating to the practices of its Merrill Lynch and Countrywide units in the run-up to the financial meltdown.

This came in the same year in which BofA reached a $9.3 billion settlement with the Federal Housing Finance Agency concerning the sale of deficient mortgage-backed securities to Fannie Mae and Freddie Mac and in which the Consumer Financial Protection Bureau ordered the bank to pay $727 million to compensate consumers harmed by deceptive marketing of credit card add-on products.

The BofA cases helped boost the total penalties paid by U.S. and European banks during the year to nearly $65 billion, a 40 percent increase over the previous year, according to a tally by the Boston Consulting Group reported by the Wall Street Journal.

Among the other big banking cases were the following:

France’s BNP Paribas pleaded guilty to criminal charges and paid an $8.9 billion penalty to U.S. authorities in connection with charges that it violated financial sanctions against countries such as Sudan and Iran.

U.S. and European regulators fined five banks — JP Morgan Chase, Citigroup, HSBC, Royal Bank of Scotland and UBS — a total of more than $4 billion after accusing them of conspiring to manipulate the foreign currency market.

Credit Suisse pleaded guilty to one criminal count of conspiring to aid tax evasion by U.S. customers and paid a penalty of $2.6 billion.

JPMorgan Chase paid $1.7 billion to victims of the Ponzi scheme perpetuated by Bernard Madoff to settle civil and criminal charges that it failed to alert authorities about large numbers of suspicious transactions made by Madoff while it was his banker.

Banks were not the only large corporations that found themselves in legal trouble during the year. The auto industry faced a never-ending storm of controversy over its safety practices. Toyota was hit with a $1.2 billion criminal penalty by U.S. authorities for concealing defects from customers and regulators. The National Highway Traffic Safety Administration fined General Motors $35 million (the maximum allowable) for failing to promptly report an ignition switch defect that has been linked to numerous deaths. Hyundai and its subsidiary Kia paid $300 million to settle allegations that they misstated the greenhouse gas emissions of their vehicles.

Toxic dumping. Anadarko Petroleum paid $5.1 billion to resolve federal charges that had been brought in connection with the clean-up of thousands of toxic waste sites around the country resulting from decades of questionable practices by Kerr-McGee, now a subsidiary of Anadarko.

Pipeline safety. The California Public Utilities Commission proposed that $1.4 billion in penalties and fined be imposed on Pacific Gas & Electric in connection with allegations that the company violated federal and state pipeline safety rules before a 2010 natural gas explosion that killed eight people.

Contractor fraud. Supreme Group BV had to pay $288 million in criminal fines and a $146 million civil settlement in connection with allegations that it grossly overcharged the federal government while supplying food and bottled water to U.S. personnel in Afghanistan.

Bribery. The French industrial group Alstom consented to pay $772 million to settle U.S. government charges that it bribed officials in Indonesia and other countries to win power contracts. Earlier in the year, Alcoa paid $384 million to resolve federal charges that it used a middleman to bribe members of Bahrain’s royal family and other officials to win lucrative contracts from the Bahraini government.

Price-fixing. Japan’s Bridgestone Corporation pleaded guilty to charges that it conspired to fix prices of anti-vibration rubber auto parts and had to pay a criminal fine of $425 million.

Defrauding consumers. AT&T Mobility had to pay $105 million to settle allegations by the Federal Trade Commission and the Federal Communications Commission that it unlawfully billed customers for services without their prior knowledge or consent.

The list goes on. Whether the economy is strong or weak, many corporative executives cannot resist the temptation to break the law in the pursuit of profit.

The ongoing corporate crime wave showed no signs of abating in 2013. Large companies continued to break the law, violate regulations and otherwise misbehave at a high rate. Whatever lip service the business world gives to corporate social responsibility tends to be overwhelmed by bad acts.

Continuing the trend of recent years, 2013 saw an escalation of the amounts that companies have to pay, especially in the United States, to get themselves out of their legal entanglements. In November JPMorgan Chase set a record with its $13 billion settlement with the U.S. Department of Justice and other state and local agencies on charges relating to the sale of toxic mortgage-backed securities. JPMorgan’s legal problems are not over. There have recently been reports that it may face criminal charges and pay $2 billion in penalties in connection with charges that it turned a blind eye to the Ponzi scheme being run by Bernard Madoff while it was serving as his primary bank.

Other banks have also been shelling out large sums to resolve disputes over the sale of toxic securities in the run-up to the financial crisis. Much of the money has gone to settlements with mortgage agencies Fannie Mae and Freddie Mac. Bank of America alone agreed to pay out $10.3 billion ($3.6 billion in cash and $6.75 billion in mortgage repurchases) to Fannie.

LIBOR MANIPULATION. In February, U.S. and UK regulators announced that the Royal Bank of Scotland would pay a total of $612 million to resolve allegations relating to rigging of the LIBOR interest rate index. In December, the European Union fined RBS and five other banks a total of $2.3 billion in connection with LIBOR manipulation.

ILLEGAL MARKETING. In November, the Justice Department announced that Johnson & Johnson would pay more than $2.2 billion to settle criminal and civil allegations that it improperly marketed the anti-psychotic drug Risperdal for unapproved use by older adults, children and people with development disabilities.

SALE OF DEFECTIVE MEDICAL IMPLANTS. Also in November, Johnson & Johnson agreed to pay more than $2 billion to settle thousands of lawsuits charging that the company sold defective hip implants, causing many individuals to suffer severe pain and injury from metallic debris generated by the faulty devices.

INSIDER TRADING. In March, the SEC announced that an affiliate of hedge fund giant SAC Capital Advisors had agreed to pay $602 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies. At the same time, a second SAC affiliate agreed to pay $14 million to settle another insider trading case. Later, SAC agreed to pay $1.2 billion to settle related criminal and civil insider trading charges.

PRICE-FIXING. In July, German officials fined steelmaker ThyssenKrupp the equivalent of about $115 million for its role in a price-fixing cartel. In September, the U.S. Justice Department announced that nine Japanese automotive suppliers had agreed to plead guilty to price-fixing conspiracy charges and pay more than $740 million in criminal fines, with the largest amount ($195 million) to be paid by Hitachi Automotive Systems.

MANIPULATION OF ENERGY PRICES. In July, the Federal Energy Regulatory Commission orderedBarclays and four of its traders to pay $453 million in civil penalties for manipulating electricity prices in California and other western U.S. markets during a two-year period beginning in late 2006.

BRIBERY. In May, the Justice Department announced that the French oil company Total had agreed to pay $398 million to settle charges that it violated the Foreign Corrupt Practices Act by paying bribes to officials in Iran.

VIOLATION OF DRUG SAFETY RULES. In May, DOJ announced that generic drug maker Ranbaxy USA Inc., a subsidiary of the Indian company Ranbaxy Laboratories, had pleaded guilty to felony charges relating to the manufacture and distribution of adulterated drugs and would pay $500 million in fines.

VIOLATION OF RULES ON THE SALE OF NARCOTICS. In June, the U.S. Drug Enforcement Administration announced that the giant Walgreen pharmacy chain would pay a record $80 million in civil penalties to resolve charges that it failed to properly control the sales of narcotic painkillers at some of its stores.

DEALINGS WITH ENTITIES SUBJECT TO SANCTIONS. In June, New York officials announced that Bank of Tokyo Mitsubishi-UFJ had agreed to pay $250 million to settle allegations that it violated state banking laws by engaging in transactions with entities from countries such as Iran subject to sanctions.

LABOR LAW VIOLATIONS. In November, the National Labor Relations Board found that Wal-Mart had illegally disciplined and fired workers involved in protests over the company’s labor practices. A Wal-Mart spokesperson was found to have unlawfully threatened employees who were considering taking part in the actions.

CLEAN WATER ACT VIOLATIONS. In May, the Environmental Protection Agency announced that Wal-Mart had pleaded guilty to charges that it illegally disposed of hazardous materials at its stores across the country. The company had to pay $81.6 million in civil and criminal fines.

HEALTH AND SAFETY CODE VIOLATIONS. In August, Chevronpleaded no contest and agreed to pay $2 million to settle charges that it violated state health and safety regulations in connection with a fire at its refinery in Richmond, California that sent thousands of people to hospital for treatment of respiratory problems.

DELAYS IN RECALLING UNSAFE VEHICLES. In August, Ford Motor was fined $17.4 million by the National Highway Traffic Safety Administration for taking too long to recall unsafe sport utility vehicles.

PRIVACY VIOLATIONS. In November, Google agreed to pay $17 million to 37 states and the District of Columbia to settle allegations that the company violated privacy laws by tracking online activity of individuals without their knowledge.

Corporate crime has been with us for a long time, but 2012 may be remembered as the year in which billion-dollar fines and settlements related to those offenses started to become commonplace. Over the past 12 months, more than half a dozen companies have had to accede to ten-figure penalties (along with plenty of nine-figure cases) to resolve allegations ranging from money laundering and interest-rate manipulation to environmental crimes and illegal marketing of prescription drugs.

The still-unresolved question is whether even these heftier penalties are punitive enough, given that corporate misconduct shows no sign of abating. To help in the consideration of that issue, here is an overview of the year’s corporate misconduct.

BRIBERY. The most notorious corporate bribery scandal of the year involves Wal-Mart, which apart from its unabashed union-busting has tried to cultivate a squeaky clean image. A major investigation by the New York Times in April showed that top executives at the giant retailer thwarted and ultimately shelved an internal probe of extensive bribes paid by lower-level company officials as part of an effort to increase Wal-Mart’s market share in Mexico. A recent follow-up report by the Times provides amazing new details.

Wal-Mart is not alone in its behavior. This year, drug giant Pfizer had to pay $60 million to resolve federal charges related to bribing of doctors, hospital administrators and government regulators in Europe and Asia. Tyco International paid $27 million to resolve bribery charges against several of its subsidiaries. Avon Products is reported to be in discussions with the U.S. Justice Department and the Securities and Exchange Commission to resolve a bribery probe.

MONEY LAUNDERING AND ECONOMIC SANCTIONS. In June the U.S. Justice Department announced that Dutch bank ING would pay $619 million to resolve allegations that it had violated U.S. economic sanctions against countries such as Iran and Cuba. The following month, a U.S. Senate report charged that banking giant HSBC had for years looked the other way as its far-flung operations were being used for money laundering by drug traffickers and potential terrorist financiers. In August, the British bank Standard Chartered agreed to pay $340 million to settle New York State charges that it laundered hundreds of billions of dollars in tainted money for Iran and lied to regulators about its actions; this month it agreed to pay another $327 million to settle related federal charges. Recently, HSBC reached a $1.9 billion money-laundering settlement with federal authorities.

INTEREST-RATE MANIPULATION. This was the year in which it became clear that giant banks have routinely manipulated the key LIBOR interest rate index to their advantage. In June, Barclays agreed to pay about $450 million to settle charges brought over this issue by U.S. and UK regulators. UBS just agreed to pay $1.5 billion to U.S., UK and Swiss authorities and have one of its subsidiaries plead guilty to a criminal fraud charge in connection with LIBOR manipulation.

DISCRIMINATORY LENDING. In July, it was announced that Wells Fargo would pay $175 million to settle allegations that the bank discriminated against black and Latino borrowers in making home mortgage loans.

DECEIVING INVESTORS. In August, Citigroup agreed to pay $590 million to settle a class-action lawsuit alleging that it failed to disclose its full exposure to toxic subprime mortgage debt in the run-up to the 2008 financial crisis. The following month, Bank of America said it would pay $2.4 billion to settle an investor class-action suit charging that it made false and misleading statements during its acquisition of Merrill Lynch during the crisis. In November, JPMorgan Chase and Credit Suisse agreed to pay a total of $417 million to settle SEC charges of deception in the sale of mortgage securities to investors.

DEBT-COLLECTION ABUSES. In October, American Express agreed to pay $112 million to settle charges of abusive debt-collection practices, improper late fees and deceptive marketing of its credit cards.

DEFRAUDING GOVERNMENT. In March, the Justice Department announced that Lockheed Martin would pay $15.9 million to settle allegations that it overcharged the federal government for tools used in military aircraft programs. In October, Bank of America was charged by federal prosecutors with defrauding government-backed mortgage agencies by cranking out faulty loans in the period leading to the financial crisis.

PRICE-FIXING. European antitrust regulators recently imposed the equivalent of nearly $2 billion in fines on electronics companies such as Panasonic, LG, Samsung and Philips for conspiring to fix the prices of television and computer displays. Earlier in the year, the Taiwanese company AU Optronics was fined $500 million by a U.S. court for similar behavior.

ENVIRONMENTAL CRIMES. This year saw a legal milestone in the prosecution of BP for its role in the 2010 Deepwater Horizon drilling accident that killed 11 workers and spilled a vast quantity of crude oil into the Gulf of Mexico. The company pleaded guilty to 14 criminal charges and was hit with $4.5 billion in criminal fines and other penalties. BP was also temporarily barred from getting new federal contracts.

ILLEGAL MARKETING. In July the U.S. Justice Department announced that British pharmaceutical giant GlaxoSmithKline would pay a total of $3 billion to settle criminal and civil charges such as the allegation that it illegally marketed its antidepressants Paxil and Wellbutrin for unapproved and possibly unsafe purposes. The marketing included kickbacks to doctors and other health professionals. The settlement also covered charges relating to the failure to report safety data and overcharging federal healthcare programs. In May, Abbott Laboratories agreed to pay $1.6 billion to settle illegal marketing charges.

COVERING UP SAFETY PROBLEMS. In April, Johnson & Johnson was ordered by a federal judge to pay $1.2 billion after a jury found that the company had concealed safety problems associated with its anti-psychotic drug Risperdal. Toyota was recently fined $17 million by the U.S. Transportation Department for failing to notify regulators about a spate of cases in which floor mats in Lexus SUVs were sliding out of position and interfering with gas pedals.

EXAGGERATING FUEL EFFICIENCY. In November, the U.S. Environmental Protection Agency announced that Hyundai and Kia had overstated the fuel economy ratings of many of the vehicles they had sold over the past two years.

UNSANITARY PRODUCTION. An outbreak of meningitis earlier this year was tied to tainted steroid syringes produced by specialty pharmacies New England Compounding Center and Ameridose that had a history of operating in an unsanitary manner.

FATAL WORKFORCE ACCIDENTS. The Bangladeshi garment factory where a November fire killed more than 100 workers (who had been locked in by their bosses) turned out to be a supplier for Western companies such as Wal-Mart, which is notorious for squeezing contractors to such an extent that they have no choice but to make impossible demands on their employees and force them to work under dangerous conditions.

UNFAIR LABOR PRACTICES. Wal-Mart also creates harsh conditions for its domestic workforce. When a new campaign called OUR Walmart announced plans for peaceful job actions on the big shopping day after Thanksgiving, the company ignored the issues they were raising and tried to get the National Labor Relations Board to block the protests. Other companies that employed anti-union tactics such as lockouts and excessive concessionary demands during the year included Lockheed Martin and Caterpillar.

TAX DODGING. While it is often not technically criminal, tax dodging by large companies frequently bends the law almost beyond recognition. For example, in April an exposé in the New York Times showed how Apple avoids billions of dollars in tax liabilities through elaborate accounting gimmicks such as the “Double Irish with a Dutch Sandwich,” which involves artificially routing profits through various tax haven countries.

FORCED LABOR. In November, global retailer IKEA was revealed to have made use of prison labor in East Germany in the 1980s.

Note: For fuller dossiers on a number of the companies listed here, see my Corporate Rap Sheets. The latest additions to the rap sheet inventory are drug giants AstraZeneca and Eli Lilly.

The Dirt Diggers Digest is taking a break from commentary for the Thanksgiving holiday, but the Corporate Rap Sheets project marches on. I’ve just posted a dossier on drug giant Pfizer. Here is its introduction:

Pfizer made itself the largest pharmaceutical company in the world in large part by purchasing its competitors. In the last dozen years it has carried out three mega-acquisitions: Warner-Lambert in 2000, Pharmacia in 2003, and Wyeth in 2009.

Pfizer has also grown through aggressive marketing—a practice it pioneered back in the 1950s by purchasing unprecedented advertising spreads in medical journals. In 2009 the company had to pay a record $2.3 billion to settle federal charges that one of its subsidiaries had illegally marketed a painkiller called Bextra. Along with the questionable marketing, Pfizer has for decades been at the center of controversies over its pricing, including a price-fixing case that began in 1958.

In the area of product safety, Pfizer’s biggest scandal involved defective heart valves sold by its Shiley subsidiary that led to the deaths of more than 100 people. During the investigation of the matter, information came to light suggesting that the company had deliberately misled regulators about the hazards. Pfizer also inherited safety and other legal controversies through its big acquisitions, including a class action suit over Warner-Lambert’s Rezulin diabetes medication, a big settlement over PCB dumping by Pharmacia, and thousands of lawsuits brought by users of Wyeth’s diet drugs.

Also on Pfizer’s list of scandals are a 2012 bribery settlement; massive tax avoidance; and lawsuits alleging that during a meningitis epidemic in Nigeria in the 1990s the company tested a risky new drug on children without consent from their parents.

Free market ideologues love to quote Adam Smith, but one passage from The Wealth of Nations that they tend to downplay is Smith’s observation that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Americans today tend to think of price-fixing as a characteristic of the age of the Robber Barons and something that was dealt with by the Progressive movement. It is true that many anti-competitive practices were outlawed by the 1890 Sherman Act and the 1914 Clayton Act, but those laws did not put an end to attempts by corporations and their executives to keep prices artificially high.

Subsequent decades saw major revelations about price-fixing cartels, such as the big electrical equipment industry conspiracy of the 1950s and early 1960s in which companies such as General Electric were implicated. The 1990s saw, for example, the revelation of a conspiracy by companies such as Archer Daniels Midland to fix the price of the animal feed additive lysine. Unfortunately, what many people may recall of that case has now been colored by the comic way it was depicted in Steven Soderbergh’s 2009 film The Informant!

A spate of recent cases shows that, even at a time of purported hyper-competition, price-fixing conspiracies are still with us:

Furukawa Electric Co. Ltd. just agreed to plead guilty and pay a $200 million fine to the Justice Department for its role in a criminal price-fixing and bid-rigging conspiracy involving the sale of parts to automobile manufacturers. Three Furukawa executives, who are Japanese nationals, agreed to plead guilty and serve prison time in the United States ranging from one year to 18 months.

Former executives from Panasonic, Whirlpool and Tecumseh Products were recently indicted in federal court on charges that they conspired to fix the prices of refrigerant compressors. Earlier, Panasonic and a Whirlpool subsidiary pleaded guilty to related charges and were sentenced to pay a combined fine of $140 million.

Another Japanese company, Bridgestone, agreed recently to plead guilty and pay a $28 million criminal fine to the Justice Department for its role in conspiracies to rig bids and to make corrupt payments to foreign government officials in Latin America related to the sale of marine hose and other products.

More than a dozen carriers, including Singapore Airlines, have been caught up in an investigation of a conspiracy to fix air freight prices for shipments going to and from the United States.

Although Asian companies seem to have predilection for price-fixing, U.S. firms are not immune. During recent months the Justice Department has obtained guilty pleas from domestic firms such as aftermarket automobile light distributors in California and ready-mix concrete companies in Iowa.

As in the refrigerant compressor case cited above and the 1990s lysine case, U.S. firms often join with their foreign “competitors” in the conspiracies. The big European paraffin cartel that came to light in 2008 involved secret meetings at a moat-ringed French chateau with representatives of ExxonMobil, Royal Dutch Shell, Repsol of Spain and Sasol of South Africa. European antitrust officials fined Procter & Gamble along with Unilever earlier this year for fixing prices of laundry detergent.

At a time of modest inflation, including falling prices for some popular electronic products, it may be tempting to brush aside price-fixing as an insignificant problem. The fact that the conspiracies often involve industrial components means that consumers do not readily see the effects of anti-competitive practices.

Price-fixing does have an impact. A survey by John M. Connor of Purdue University found that over the long run price-fixing cartels result in overcharges of more than 20 percent.

The fact that price-fixing is still a frequent occurrence is yet another rebuttal to those libertarian and laissez-faire types who insist that government regulation of business is unnecessary and counter-productive. We can’t forget the lesson learned by the Progressive movement more than a century ago: Left to their own devices, large corporations will not act in the public interest and will even undermine the very principle of competition on which capitalism is supposed to be based.